Jeffries is preparing to sponsor $143.2 million in securitized bonds backed by unsecured consumer loans underwritten largely through income verification.
The trust, Upgrade Master Pass-Thru Trust, series 2025-ST2, will issue just one tranche of notes, which gets a BBB rating from Morningstar | DBRS, which has an expected final maturity date of June 15, 2032.
Several Jefferies affiliates and subsidiaries will function as purchaser, depositor and other administrative service providers on the transaction, DBRS said.
Some 14,185 loans are backing the collateral pool, with an average amount of $14,520, DBRS said. On a weighted average 9WA) basis, the loans have a remaining term of 49 months, and a WA current FICO score of 695.
Cross River Bank and Blue Ridge Bank originated the underlying loans in the pool, while Upgrade will service the loans, according to the rating agency. Systems & Services Technologies is the backup and successor servicer, the rating agency said.
Upgrade's capital structure includes initial overcollateralization (OC) that equals 30.0% of the pool's loan balance as of the April 13 cutoff date. That layer of credit enhancement is expected to build to the required overcollateralization amount, which is either the target OC amount or 2.0% of the cutoff date loan balance, whichever is greater.
Also, the deal will trigger an amortization event if the cumulative net default ratio exceeds certain predetermined percentages.
Loans made in Texas, California and Florida represent 10.52%, 10.43% and 8.80%, respectively, of the pool.
